1Thailand Taxation and Investment 2012
1.0 Investment climate
1.1 Business environment
Thailand is a constitutional monarchy with a parliamentary democracy. The Prime Minister acts asthe head of government (the Prime Minister usually is the leader of a majority political party). TheKing is the head of state, exercising sovereign power through the parliament and the cabinet, andthe courts under the provisions of the Constitution.The Thai economy, traditionally based on agricultural exports, has transformed dramatically over the past few decades, with industry and services assuming a more prominent role. Industrialactivity is concentrated in the central region around the capital, Bangkok. However, thegovernment has aimed to decentralize Thailand’s industrial base through the creation of investment promotion zones throughout the country.Thailand enjoys Generalized System of Preferences benefits from a number of countries/regions,including Australia, Canada, the EU, New Zealand and the US, and has comparable access to theJapanese market.Thailand is a member of the World Trade Organization (WTO). Along with Brunei Darussalam,Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore and Vietnam, Thailand isa member of the Association of Southeast Asian Nations (ASEAN), a trade and social allianceintended to foster economic and social cooperation among ASEAN members and, among others,to establish a joint market for attracting foreign trade and investment. The regional cooperation hasbeen developed in economic integration by forming an ASEAN Economic Community (AEC),aiming to create a single market and achieve the free movement of goods, services, investment,capital and skilled labor by 2015. Thailand is also a member of the Asia-Pacific EconomicCooperation (APEC).
The Department of Internal Trade in the Ministry of Commerce administers price controls under thePrice on Goods and Services Act. Price controls apply to certain goods and services, such aspetroleum, diesel, and delivery and repair services.The Trade Competition Board can draft and enforce regulations and declare particular goods or businesses as controlled, subjecting them to price and monopoly controls. These regulations arereviewed at least annually and are subject to change depending on economic conditions and other factors.The Price of Goods and Services Act identifies business practices that are considered illegal or aninfringement of the free market system.
Thailand has three major laws dealing with intellectual property: the Patent Act, Trademark Act andCopyright Act.The Patent Act has adopted internationally recognized rules and principles, including those of theParis Convention (of which Thailand is a member party), the Patent Co-operation Treaty, the WorldIntellectual Property Organization Model Law, the Harmonization Treaty and the Draft Agreementon TRIPs, including Trade in Counterfeit Goods.The Patent Act recognizes priority rights based on filing dates. An application for a patent filed inThailand within 12 months (six months for a product design patent) after a prior application hasbeen filed abroad will be deemed to be filed in Thailand on the date the prior application was filed.This priority right may be claimed provided the foreign country involved offers reciprocal rights toThai nationals.Trademark legislation provides protection for international brands registered in Thailand andprotects Thai brands registered abroad. The Trademark Act also provides for the registration of